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Milton Friedman, A Centennial Appreciation

At the height of the Vietnam War, U.S. commander Gen. William
Westmoreland testified before the President’s Commission on an
All-Volunteer Force. The 15 members of that commission were charged
with exploring the feasibility of ending the military draft.

Staunchly opposed to an all-volunteer military, which must pay
its soldiers market wages, Gen. Westmoreland
proclaimed that he did not want to command “an army of
mercenaries.” One of the commission members immediately shot back
with a question: “General, would you rather command an army of
slaves?” That penetrating query was posed by Milton Friedman, a
diminutive (he stood only 5 feet 3 inches tall) giant among
20th-century scholars. Were he still alive — he died in 2006
— Friedman would celebrate his 100th birthday on July
31.

Bald and bespectacled, Friedman looked every part the University of Chicago
economics professor that he was. During his long tenure at that
celebrated institution, he produced a stream of cutting-edge
research on consumer behavior, on the role of money, and on the
history of U.S. and British monetary policy. The impressive
quantity, quality, and importance of this research without doubt
places Friedman among the top two or three economists of the past
century.

Friedman, indeed, is one of the few scholars whose receipt of
the Nobel Prize in Economics
— which he received in 1976 — did at least as much to
bestow prestige on that award as that award did to bestow prestige
on him. (The first Nobel Prize in Economics wasn’t awarded until 1969.)
Friedman’s stupendous scholarly achievements alone justify
commemoration of the centenary of his birth.

But at least as important as Friedman’s scholarship was his
lucid and energetic public advocacy of limited government and free
markets. He explained with unmatched clarity how a modern economy’s
complexities, nuances, and dynamism almost always thwart even the
best-intentioned efforts by government officials to intervene into
markets.

In a scene from the opening episode of his successful 10-part
1980 PBS series
“Free to Choose,” Friedman held in his hand an ordinary pencil.
Looking into the camera, and speaking without a script, he
explained that a pencil — so seemingly simple —
requires for its production the knowledge and labors of millions of
people from around the world.

Some workers cut down the trees; other workers make the
chainsaws used to cut down the trees; yet other workers make the
steel used to manufacture the chainsaws; and yet other workers
specialize in mining the iron ore used to make the steel. Still
other workers mine the graphite to make the “lead” for the pencil,
while many others work in factories to make the yellow paint that
commonly adorns pencils, while still other workers perform the many
tasks required to produce the rubber for each pencil’s eraser.

Just to list the number of different, highly specialized jobs
that must be performed to produce a commonplace pencil would take
volumes. Few of these workers know each other, and none of them
knows how to do any more than one or two of the countless jobs that
must be done if we are to be well-supplied with pencils.

Friedman explained how free-market prices, along with the lure
of profit and the fear of loss, guide entrepreneurs, firms, and
workers from across the globe to produce just the right amounts of
wood, graphite, paint, erasers, and the many other parts of
pencils.

No government commissars are involved. There’s no central plan
for the production of pencils. Yet we have high-quality pencils in
abundance and for sale at low prices. What’s true for pencils, of
course, is true also for more complex items such as automobiles,
electric lighting, MRI machines, and on and on — that is, for
nearly every good commonly found in modern industrial society.

No one equaled Friedman’s skill at explaining how free markets
succeed at coordinating the activities of legions of individuals to
produce the goods and services that we today take for granted.
Likewise, no one equaled his skill at explaining how government
regulators are typically oblivious to the complexity of the
coordination achieved by markets. Being oblivious, regulators’
interventions too often obstruct this market coordination.

Note that Friedman would heartily agree with President Obama that no
one prospers in today’s economy exclusively through his or her own
individual efforts. Where Friedman would disagree — and
disagree strongly — is with Obama’s suggestion that the main source of help
that each of us gets from others is government. While government
might supply some necessary pieces, such as highways and law
courts, the vast bulk of what society supplies for each person’s
sustenance and success comes not from government but from the
ongoing private efforts of millions of individuals acting in free
markets.

Friedman’s brilliant use of the pencil, like his reply to Gen.
Westmoreland, reveals the great talent Friedman had
for cutting to the heart of the matter in ways easily understood by
almost everyone.

Revealing the awesome complexity of the humble pencil makes
clear that no government regulators can ever hope to know enough
about the entire economy to regulate it as well as it is regulated
by free-market forces. Calling the military’s seizure of years of
labor from young men “slavery” reveals the fact that draftees
— like plantation slaves of old — are forced against
their will to work for others and on terms dictated by others.

Friedman’s response to Gen. Westmoreland is evidence also of
Friedman’s lifelong commitment to the cause of human freedom. Not
only was conscription economically inefficient (as Friedman showed
in academic research), it was also an affront to the values of a
free society.

In a free society government is kept as small and as constrained
as possible, charged with doing only those few tasks that are
widely believed to be doable only by government — tasks such
as building roads and supplying national defense. All other tasks
are left to the creative forces of the free market. And in doing
those few tasks, Friedman maintained, the freedom and dignity of
every individual must always be respected.

Americans of my generation likely first encountered Friedman
through his regular column in Newsweek, which ran from 1966
through 1984. Each of these essays cogently made the case for
reducing the reach of government. In making this case, Friedman
consistently defied conventional stereotypes. He was, he always
insisted, not a conservative but, rather, a liberal — a true
liberal, in the original meaning of that term.

Being a classical liberal, Friedman vigorously championed not
only economic freedoms but also freedoms emphasized by many folks
on the political left, such as freedom of speech and of assembly.
It speaks volumes of Friedman’s principles that he, the owlish and
dedicated scholar so beloved by many establishment conservatives
for his support of free enterprise, was among the most vocal and
unwavering opponents of the “war on drugs.” He insisted, with
characteristic wit, that “the government has no more right to tell
me what goes into my mouth than it has to tell me what comes out of
my mouth.” Truly great men and women are rare. What they all share
is the courage of their convictions, the wisdom to distinguish cant
from reality, and enormous energy and ability in working to make
the world a better place. Milton Friedman was one such genuinely
great man.